Two things keeping US fleet execs up at night

August 30, 2010

August 30, 2010
by
James Menzies

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I spent the better part of last week in Dallas, attending the first annual Commercial Vehicle Outook Conference. It was a good conference, with a wide range of respected speakers from industry representing OEMs, carriers and freight forecasters.
The overall tone of the conference was upbeat. Industry analysts feel the industry is headed in the right direction, despite waning consumer confidence and a slowdown in housing starts. When it gets right down to it, it’s freight volumes that matter most, and they are trending up in virtually every mode, presenters at the conference pointed out.
But the road ahead is not without its bumps. There were two concerns weighing heavily on the minds of fleet executives who spoke at the conference. One is that US hours-of-service will, in fact, be reduced as early as this fall. Perhaps I’m naïve. I thought the current review was Obama’s way of placating special interest groups who had challenged the current rules, claiming they are unsafe, and that after a thorough review no substantial changes would be implemented. After all, highway and truck safety have both improved under the current HoS rules, so they can’t possibly be a concern. Looks like I was wrong on that one. Industry reps at the conference seem resigned to the fact that US hours-of-service will be reduced by one or two hours per day and the 34-hour reset could even be extended to 48 hours.
“The hours-of-service rewrite is a political football and it will have nothing to do with good science,” said ATA chairman Tommy Hodges, who also runs Titan Transfer. “It’s a political football that is going to get passed over our heads. There’s a good possibility we will lose one to two hours of driving time and there’s a strong possibility we’ll lose the 34-hour restart.”
Losing two hours of driving time per day would be a 18-19% productivity hit in the trucking industry, including for those of you running into the US. Fleet executives on-hand said it will require a change of mindset; trucking companies will need to start measuring productivity based on time, not miles.
A possible reduction in legal working hours for truck drivers may be compounded with what was predicted at the conference to be a driver shortage of unprecedented proportions. It’s possible CSA 2010 may make up to 200,000 current drivers unemployable.
“This industry historically thinks in terms of miles,” said Tom Kretsinger, president and CEO of American Central Transport. “I think one of the key measures will have to be time. What percentage of this limited time can we put to good revenue use for us and the driver.” (Another sign that a shift towards hourly pay for drivers is gaining momentum?)
As for CSA 2010, there’s growing recognition that the safest, most compliant drivers will have an Ace up their sleeves when it comes to partnering with the best carriers and commanding top rates. I’ve wondered, aloud at times, whether we’ll see tiered pay packages based on the CSA 2010 scores a driver brings to a carrier. It may happen.
Hodges referred to CSA 2010 as the ‘Free Agency for Drivers Bill.’ He said the safest drivers will be like a free agent pro athlete, able to offer their services to the highest bidder, knowing just how important a driver’s CSA 2010 score will be to his/her employer.
“A driver who knows he’s got a good record, knows how to abide by the rules and knows his value to my company, he’ll say ‘look at my score, you’re going to pay me 50 cents/mile or I’ll go over to XYZ and they will,” Hodges predicted.
Kretsinger took it a step further, saying “I’m not managing this company at the moment. The drivers are, because they’re in short supply.”
A potential reduction in legal working hours, coupled with a driver shortage that’s already becoming evident, combined with a possible purging of existing drivers brought on by CSA 2010, could result in a major capacity crisis, presenters said. Several said there will be instances where freight sits undelivered on shippers’ docks. It will be fascinating to see how it plays out over the next couple of years.

James Menzies

James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at james@newcom.ca or follow him on Twitter at @JamesMenzies. All posts by James Menzies

Dear James:
Good to know that you attended the first Commercial Vehicle Outlook Conference in Dallas. You provide a good summary and some valuable information on trends put forward by speakers and forecasters. There seems to be light at the end of the tunnel.
I am very sad to learn that the “Hours of Service” movement is really gaining steam. Bad legislation. This would set back an industry trying to claw its way back. This legislation must be stopped.
I am calling on interested transportation and related professionals who are part of or support the transport industry to write to US publications and government officials opposing this misguided legislation.
If it passes in the United States, it will come here as a political compromise to the strong safety lobby. Please speak up.
Mark Borkowskihttp://www.mercantilemergersacquisitions.com
regular columnist in MotorTruck – Fleet Executive

Glad to see your on top of things before they arrive. I still believe that no matter what they do with the hours of service the drivers will still work a 16-18 hour day and general average it into the existing H.O.S. to be compliant.
My previous employer lost a dedicated run because us drivers refused to drive beyond our safety means. The shipper just found another company to haul it. As far as the CSA 2010, the U.S. has started it and the officer at one Ontario scale said she was reading up on it because she has not been told anything of it from the M.T.O.
Perhaps the fear of enforcement will be the driving force of compliancy. I heard rumors that we are closing a couple of scales and Ohio only has 4 scales open in the whole state.
This is a hard issue at hand and I do hope they can unify a North American Safety Compliance legislation. Until then I’m afraid it’s the same old story and the means will never see its end.
Keep on truckin and be safe.

its amazing how all those so called experts keep talking about a driver shortage.there very well may be but its mostly a money shortage brought on by the big companies because they are so worried about size that they forget about the available freight.they just buy more equipment for the sake of bragging rights,NOT for economic reasons.if the industrie can pay 50-60 c/mi or $25-30/hour we will get all the manpower we need and some.the whole industrie however has the mindset that we have to provide an essential service at or below cost and by the whole industrie, i also include our representatives.we do NOT have a mandate with any shipper to work for free over the backs of our drivers.here is a challenge to ALL trucking firms to only haul freight that pays and leave the rest alone,the paid rate WILL rise so we can pay better wages,get the better people or provide more training and a better return on investment.a few months ago there was an article about a CEO out of the east because he was bragging about buying more vans and go after the LVC freight in the west.I AM SURE THAT THE CARRIERS HERE CAN PROVIDE AMPLE EQUIPMENT TO HANDLE IT.this was the same guy that was preaching restraint if and when freight would pick up.THAT ATTITUDE IS EXACTLY WHAT KEEPS THE RATE IN THE BASEMENT,NOT LACK OF WILLINGNESS TO PAY ON BEHALF OF SHIPPERS.UNTILL THIS UTTER STUPIDITY ON BEHALF OF BIGGER COMPANIES STOPS IT WILL NEVER CHANGE AND WE WILL CONTINUE TO BE TAKEN TO THE CLEANERS BECAUSE THE INDUSTRIE IS A WILLNG LAMB.STOP BUYING EQUIPMENT,USE WHAT YOU HAVE A LOT MORE EFFICIENTLY INSTEAD OF PARKING IT AGAINST THE FENCE AND SEE WHAT HAPPENS TO THE RATE.i will be happy to discuss any point of view and reason for the improvement of the industrie.i am also well aware that its a free world and everybody has the right to go broke even at their own misguided decisions and attitudes.keep safe.wim van meijl,vm transport ltd.ph # upon request,i dont know if the paper allows me to print it..

It is good to read all of the comments you have raised about the push for an Hours of Service law and the issues put forward by James Menzies. Not all agree.
I believe that David Robson is correct when he says that drivers will still work a 16-18 hour day. This may be excessive, but will not be in compliance. They need the freedom to do so if they wish. Their and company choice.
When will the transportation industry executives understand that with more legislation and regulation, they are turning the transport industry into a low level and low margin service business?
Please stand behind me and the transport industry to stop this bad legislation. It starts with an inch, and then they take a mile.
Mark Borkowski
Mercantile Mergers & Acquisitions Corp
regular Columnist for MotorTruck- Fleet Executive

As liquid is wanton to take the path of least resistance, so to will the dynamic repercussions of this legislation. The predictable affects of such a move could have drivers being recycled more often as they where out there score card, the “fly -by-night” having a field day while reputable carriers abide by the law, and an all out challenge to a floundering economy as more revenue is poured into enforcement. Not exactly a recipe to fire up an economy and keep freight moving efficiently. In true , naive liberal fashion, achieving perfection is actually believed to be attainable through social engineering. The fantasy land where accidents never happen and no one ever dies.
As for an hourly rate ,10 hours a day at $19 per hour is hardly a winning formula to get truckers interested in long haul. No thank you .I’ll run Canada where freedom reigns.